Tencent's Ma Proposes Bay Area-Like Tech Zone in South China

(Bloomberg) -- Tencent Holdings Ltd.'s Chairman Ma Huateng proposed to build China's own Bay Area equivalent with a technology zone in southern China that would include the financial center of Hong Kong and gambling city of Macau.

China's fourth-richest man said on Friday that setting up a “Guangdong-H.K.-Macau” technology area could help maintain stability in the two former colonies. Ma was speaking at a press conference two days before the National People's Congress convenes in the capital to set the year's agenda.

As a delegate at the country's most important annual convention, Ma suggested the proposed tech bay could leverage capital from Hong Kong and manufacturing prowess from Shenzhen and the Pearl River Delta. China “has the ability to create a world-class tech bay area, and preside over the global tech revolution of the future,” said Ma, who runs the second-largest internet company in China. “It will also help the long-term stability and prosperity of Hong Kong and Macau.”

Innovation Drive

Tencent's headquarters are in Shenzhen in Guangdong province -- a region racing against Beijing and Hangzhou to forge China's equivalent of Silicon Valley. Responding to the central government's call to “ignite the innovative drive,” more than 120 tech zones have mushroomed across the country, all vying for talent and capital.

Best known for the instant messaging app WeChat, Tencent has built an empire of news portals, movies, online books and online games including Clash of Clans.

Chinese President Xi Jinping has identified the internet as one of the most import sectors for official oversight -- a level of strategic importance on par with ethnic minority leaders or Taiwan's political parties. He has reminded the country's technology parvenus that they should “demonstrate positive energy in purifying cyberspace” and called for regular contact with new media representatives to build support for the party's agenda.

The elevated status puts billionaires like Ma and Alibaba Group Holding Ltd.'s Jack Ma, who isn't related, under extra scrutiny. Their riches and success have also inspired a younger generation of entrepreneurs, prompting 1.15 trillion yuan ($167 billion) of funds to be amassed by the country's venture and private equity firms in the first 11 months last year, according to consultancy Zero2IPO Group.

Ecological Cities

Ma said Tencent would be willing to use its big data technology to help China built more ecological cities that, for example, would utilize marshlands to purify water. He also called for more protection of personal information and data.

Ma wants the country to place national strategic importance on digital content and advocated using Chinese capital to acquire overseas intellectual property.

Already, Tencent is making inroads in Hollywood, funding blockbusters including “Kong: Skull Island” and “Warcraft.” It has an abundance of intellectual property for anime and online novels distributed via its websites. The company has aspirations to create a Marvel-like movie empire, as it competes with Alibaba for viewers.

In his policy proposal last year, Ma advocated making the internet more accessible, asking regulators to lower the barriers of entry to spur innovation and content creation.

With more than 800 million people using WeChat to communicate, share photos and post articles, the authorities have started efforts aimed at reining in the social media service.

China passed a controversial cyber security law in November requiring internet operators to cooperate with investigations involving crime and national security. Expected to take effect in June, the law also requires companies to give government investigators full access to their data if wrongdoing is suspected.

Since October, China's law enforcement agencies have been authorized to secretly request access to personal information posted on social media services including WeChat for investigating criminal cases.

Ma said he doesn't see China's cyber security law as a hurdle, adding that the legislation in fact is in favor of larger tech companies.

To contact Bloomberg News staff for this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net, Gao Yuan in Beijing at ygao199@bloomberg.net.

To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Molly Schuetz, Robin Ajello

With assistance from Lulu Yilun Chen, Gao Yuan